What was your inspiration behind Upshift?
I grew up on a 100 acre former farm in rural Connecticut. The woods was my playground. Sticks and stones were my toys. I’ve been living in cities the last 20 years, but I’ve always spent time connecting in nature. I have this environmental awareness, but I don’t want to have a big footprint just to get out of nature; I don’t want to contribute to global warming or air pollution by owning a car. Plus, the idea of buying and owning a car that I would only use a couple of days a week just didn't sit well with me (nevermind all of the headaches with city parking, payments, insurance, maintenance, etc).
I tried probably every shared transportation app and service out there. I would often bike a mile or two to the closest car share, only to find that the car I had rented had been driven far away by the owner and wasn’t even available, the tire was flat, or it reeked of cigarettes. I once ran one errand to a nearby hardware store, but had to put $1 of gas in the car just to drive one mile because the tank was completely empty. This just didn’t seem right to me.
Tell us about your background in the shared mobility space.
I've been in the shared transportation space for 20+ years. I first co-founded a bike share program on my college campus in 1999. It had sort of a tongue in cheek communist theme to it. The bikes themselves were all tiny kids bikes which we spray painted with red hammer and sickle logos and put them out for people to use for free. Our platform was the “Reed Kommunal Shit Kollectiv and our motto was “Free Shit for All”. We also provided a bunch of other free stuff like umbrellas and stimulants during finals week. Every semester, students would vote for which organizations to fund and we were always voted #1. It wasn’t your typical bike share program, but we found it came with all of the same issues as the major tech companies have today, only without the tech and with an all-volunteer staff: bikes got stolen or vandalized, they needed to be maintained and redistributed to popular locations, etc.
If you have GPS and tech on your bikeshare, that’s cool, but it doesn’t necessarily help you get a bike out of the bottom of the bay.
After college, I worked on a folding electric scooter at the MIT Media Lab. My role there was to assess the opportunity for this in the real world: where would this work, why would people use it, and where to build stations. I analyzed the San Francisco market in 2006, and long before these came to market. I even developed a full report with proposed station locations and Caltrain integration.
I then worked on a peer-to peer car share concept in 2009 and even put together a team and a business plan. This was around the time when most of these services launched. I interviewed taxi drivers about real-time hailing and how that would work back in 2008, developing a concept for real-time ride sharing with app-enabled hailing and payments.
I pitched Google on a custom micro-autonomous electric vehicle for shared rides back in 2011. But even as these services came to market, I didn’t see how they solved the car ownership problem and the fact that half the cars are still just sitting on the streets, going unused — even with the dozens of new services we didn’t have a decade or two ago.
Any surprises or key learnings?
I did some PhD-level urban planning research in Copenhagen and ran a bunch of interviews in Danish around why people ride bikes and what would motivate them to bike more. Copenhagen has great infrastructure for this, but when I looked at the data we collected, I found that biking does not replace car ownership. In fact, biking, whether privately owned or shared, mostly complements and competes with public transit use, like buses and subways — things we take for short trips around town. Bikes weren’t eliminating the need to own a car in cities on their own.
Has anything surprised you while launching Upshift?
When we first launched with a pay-per-use model, we were more of a rental car alternative and we were used mainly for longer road trips and father distances. But as we re-positioned the company to focus on a subscription model, we saw that more and more customers were using us for short every day trips that are hard to do without a car, like rides to the store. We began to appeal to people who really love the convenience of having a car at your disposal whenever you need it, without having to think about it when you don’t. We actually “fired” our entire customer base when we made this transition from pay-per-use to subscription as it is a completely different demographic. This was a surprise, but we are now competing more with a low-mile car lease than with rental car or car share.
What’s the number one skill you think entrepreneurs need to succeed?
Grit and sheer determination. Also, being able to stay nimble and flexible, all while thinking quickly. You also have to be in it for the long haul, even when it gets difficult.
It’s also really important to listen and understand your customers and members. Being able to have that user-center design and listen for feedback is key. Delivering the car has been great for this. I’ve personally had thousands of conversations with our members while dropping off or picking up the car. We launched with an SMS-based platform initially because it was cheap, easy to launch, and flexible. But it’s actually given us a ton of conversational data and insights we never could have gotten from building an app, and about half of our members tell us they prefer it to an app!
Is there anything you wish you knew more about?
There are tons of things. As an early stage founder, there are so many things to learn. There are many facets of building a business, and when you are starting, you really do everything and have to wear all different hats.
I’m a marketer, a fleet operator, a customer support specialist—literally you touch everything in the business and you have to be ready to jump in at any moment. You have to be a generalist.
I really like the 0-to-60 part of learning. I spent many years living abroad and have had to figure it all out from scratch, including just the day to day things: the language, the health care system, housing, etc. Being in these situations doesn’t really throw me off; I see them as little challenges to new experiences.
What is your superpower?
I’m pretty creative when it comes to solutions. For example, we had to work with three insurance companies together to build our own custom commercial insurance to launch Upshift. I don’t think anyone else has this policy which has some unique features to support our growth. It took us almost a year to get everything developed and approved. We also had to time insurance, car financing, and equity investment to all come together in the same month.
Basically, we had to raise some funds to build an MVP for people to test. This involved getting commercial car debt financing, which typically requires 2 years of profitable and audited financials from operations, finding an insurance provider willing to develop a custom policy and finding users — all while getting traditional equity investors to support our launch. It took us a few years to get all of these in place at the same time. We had an insurance deal fall through after 6-9 months of building it because once we got the policy, we went out to fundraise the $25k they needed to bind it and we couldn’t raise it in the 30 day window before the policy offer expired.
We ended up launching our first five Priuses with just $73K worth of equity investment and $108K in vehicle debt financing.
What’s your kryptonite?
We don't compromise on our values. If people don’t meet us at the same level of trust, honesty, and transparency, it’s a deal breaker. We’ve turned down office spaces to align with our mission, even if it means paying more rent. In the long run, I think this will help us recruit and retain the talent we need — the ones with the integrity and honesty we are looking for.
Do you have any other hobbies/things you like to do? What do you geek out about?
I love hiking and getting out into nature. I love to ride my bicycle — I pretty much ride that everywhere I can around the city. I ride a 40- year-old beat up single speed Bianchi I bought off Craigslist for $200 in 2007. The tires are worth more than the bike. I figure I spend less than 50¢/day on maintenance and accessories so it’s practically free transportation. If the air quality is bad, I’ll ride with an N95 mask or take the bus. If it rains, I gear up in full body rain gear and bike. When I lived in Boston, I even biked in the snow (with ski goggles!).
I have a two-year-old daughter, so any chance I get to spend with her I do. I especially love to get out into nature with my family.
I don’t use too many unusual apps or devices beyond what is probably on most people’s phones, but I am a big fan of several apps that help check air quality. Between increasing wildfires, congestion, and climate change, the air in the Bay Area has gotten so bad that I’ve had to have N95 face masks. When the air quality gets worse than 100 AQI I try to avoid going outside or biking heavily. When it’s above 150, I wear a mask. I think we need to be talking about air quality and doing more to improve it. Transportation emits more than half of the nitrogen oxides in our air and around one third of greenhouse gas emissions, that’s why we are working to scale up the shared use of hybrid (and eventually electric) vehicles and we use a bicycle to get between car deliveries.
If you could give yourself one piece of advice going back to your startup in college, what would it be?
Don't let anybody tell you it can’t be done. There's a lot of naysayers out there. You have to knock on one hundred doors sometimes to get the one that will say yes, and you don't know if something will work until you actually do it. So just have the determination that there’s a there there.